RBNZ reduces monetary stimulus

Note: This section contains information in English only.
Source: Dukascopy Bank SA
On July 14, at 02:00 GMT, the Reserve Bank of New Zealand made a Rate Statement. In general, the bank once again kept its interest rate at 0.25%. However, the bank revealed in its statement that the bank would reduce monetary stimulus.

Quoting the statement: "The Monetary Policy Committee agreed to reduce the current stimulatory level of monetary settings in order to meet its consumer price and employment objectives over the medium-term.

The Reserve Bank will halt additional asset purchases under the Large Scale Asset Purchase (LSAP) programme by 23 July 2021. The Committee will keep the Official Cash Rate (OCR) at 0.25 percent and the Funding for Lending Programme unchanged."

Monetary Policy Statement

Monetary Stimulus Reduced

In the immediate five minutes after the announcement, the NZD/USD surged by 33 base points, as the value of the New Zealand Dollar surged. In addition, note that the jump was part of a larger 80 point move up.

Initial Reaction

Larger scale situation

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